Looks like I spoke too soon. I tried installing the admin tools again on a clean workstation, and this time the SP1 install ran correctly. Looks like something on my machine is throwing off the updater.
I agree with Bernd, having to run a second machine for Exchange admin or a Virtual PC session is not something I want to have to do for every person who might need to admin Exchange. I prefer they do it from a workstation to limit logons to the actual mail server itself.
The KB seems to talk just about problems with custom MAPI providers. If you don't use any custom MAPI providers, is it a problem if Outlook uses its DLL and System Tools use its own? From the way the article is written, it wouldn't seem to be a problem in that situation.